JMA Ventures can look to other cities for inspiration on what to do with the mall. San… more

Photo: Vicki Thompson

As they figure out what to do with Downtown Plaza, the new owners could pull all sorts of ideas from other downtowns — and even from suburban mall makeovers elsewhere in the nation.

Transform the mall into a sports-lover’s oasis with athletic courts, like Cincinnati Mall is doing. Tear it down to create a park and pavilion for concerts and develop mixed-use buildings around it, like in Columbus, Ohio. Reposition the mall as a luxury center, as Portland’s downtown mall has done with Tiffany & Co., Louis Vuitton and Apple.

JMA Ventures can look to other cities for inspiration on what to do with the mall. San… more

Photo: Vicki Thompson

But no single idea can be plucked from elsewhere and effectively transplanted to Sacramento, experts say.

“There isn’t a cookie-cutter to success, particularly in a downtown environment,” said Rob York, a Los Angeles real estate development consultant who locally has advised the Sunrise MarketPlace district in Citrus Heights and Fountains at Roseville.

Every mall and every city has its own circumstances, demographics, competitors and political and economic environments. But JMA Ventures LLC, which last week purchased Downtown Plaza from Westfield Group LLC, will be looking around to see what has and hasn’t worked elsewhere.

Timing, momentum count

What models might JMA Ventures consider? Those often mentioned include Santana Row in San Jose, Santa Monica Place, City Creek Center in Salt Lake City and Horton Plaza in San Diego.

Santana Row, an upscale district of shopping, dining, entertainment and housing, is always cited as an example of a successful redevelopment. The shops and restaurants pull in customers. But the project lost a huge amount of money for developers, real estate observers noted, in part because they bought land at the peak of the market.

Key to the transformation of Santa Monica Place was taking the roof off of an outdated indoor mall. Likewise, City Creek Center in Salt Lake City was a combination of old and new construction and a mix of uses, but it too went to open-air, except for a retractable glass roof. Open-air — that’s one thing that Downtown Plaza can already check off its list.

In the 1970s, Horton Plaza was developed along with a convention center and housing in large part through redevelopment funds. That project demonstrates the importance of timing and having the right momentum and people behind a project, said Garrick Brown, research director with the Terranomics brokerage in Sacramento.

Knock it down?

It’s too soon to know if Cincinnati Mall — in the suburbs — will succeed in the long term, but it certainly has done well with leasing toward its sports focus. Opened in 1989, the mall is on its fourth owner and its third name with a possibility of a fourth, said Jim Flick, research director for Cassidy Turley Commercial Real Estate Services. It has two malls within 10 miles. It’s gone the high-end route. It’s gone the discount route.

When new owners bought the 1.5 million-square-foot mall two years ago for $4.75 million — and observers thought Downtown Plaza was a bargain — it was 65 percent vacant, Flick said. Since January, the mall has signed 350,000 square feet of new tenants. One company alone took 270,000 square feet in a 25-year lease for three ice rinks, 12 volleyball courts and synthetic turf for baseball, lacrosse and other sports.

In a public-private partnership, Columbus went to an extreme — a model that Sacramento almost certainly will not follow — by knocking down its downtown mall and replacing it with a park on top of the existing parking garage, a stage, gardens and cafes.

In Portland, meanwhile, General Growth Properties repositioned its Pioneer Place downtown mall into a luxury center. The transformation is continuing and some vacancies remain, but it has had success. The Tiffany, Louis Vuitton and Apple stores there are among the top performers within their respective companies. When Saks Fifth Avenue closed its shop in the recession, H&M took some of its space.

General Growth is requiring tenants with exterior walls to embrace the street with active displays and exterior doors.

Later, the mall owners plan to shed the generic food court operators and instead focus the food area around Portland’s local cart scene.

This model works in part because Oregon is a destination for luxury shoppers attracted by the state’s lack of a sales tax. The project also benefitted by the city’s investment nearby of converting a former department store into a fashion-oriented hotel called The Nines.

Opening up the fortress

For Downtown Plaza’s new owners, the decisions are more involved than determining if the new model also will include a hotel, apartments, a big entertainment tenant or gardens.

The new owners must weigh a multitude of other questions: Is the city of Sacramento seen as predictable in its development approval process? Can the developer or city offer services of a retail consultant to help existing retailers stay in business? What incentives can the city offer the project or retailers now that California no longer offers redevelopment? Does the city have high standards for building design and store signs? The best retailers avoid cities with lax standards, said Robert Gibbs, an urban retail planning consultant in Michigan.

Downtown Plaza’s struggles are not surprising. In the 1970s and 1980s, many downtown malls were built as fortresses with no connection to surrounding streets. Store logistics and the hefty cost of display windows were a couple of factors, Gibbs said.

Sacramento city leaders and consultants not involved with Downtown Plaza say the mall needs to be more outward facing to surrounding streets and commercial districts. Blank walls are “not welcoming,” York said.

And like Sacramento, other downtowns long ago created car-free areas that wound up driving away shoppers. Sacramento and other downtowns have more recently re-opened the streets to vehicles with hopes of boosting business.

What the city can do

The city of Sacramento could take a few other steps to help the mall. The city should ensure that its parking garage under the mall is clean and well lit, Gibbs said. Also, “the garages should be free for the first two hours so they can compete with the suburbs.”

City officials also should meet with Macy’s managers, he said.

“They’re very fortunate they still have their department store,” Gibbs said. “They have to shore up the department store and see what they need.”

In one Midwestern city that he wouldn’t name, Macy’s asked for financial help from the city and the city said no. Macy’s closed, and the mall closed a few months later.

Downtown Plaza, Gibbs said, needs two to three anchors or some junior anchor stores.

Sacramento’s mall also needs “to have a story to tell,” he said, like that the mall is going to focus on home furnishings or restaurants or that it is going to attract a particular big-name anchor.

When Forever 21 opened in downtown Santa Cruz at a former Borders, 500 people were lined up at 5 a.m., he recalled.

Downtown Plaza’s new owners “need to go out and find that unique store.”

For years, retail brokers, consultants and developers have bemoaned the lack of department store options to replace stores that leave. But some foreign retailers want to expand in the United States and some U.S. retailers have some new store concepts, Gibbs said.

Target, for example, has an urban concept called City Target. Sears has SR3, a marketplace within the department store with space leased to one-of-a-kind local boutiques. Similarly, JCPenney plans to lease space to little stores within its department stores.

The transformation of Downtown Plaza won’t be easy, but it is doable, York said. JMA Ventures doesn’t need to tear down the mall. Instead, he said, the company has to figure out what works and what doesn’t.

Portland Business Journal reporter Wendy Culverwell contributed to this story.